Mastering competitive analysis: a step-by-step guide for businesses (plus template)

The adage “comparison is the thief of joy” doesn’t apply to brands. Regularly conducting a competitive analysis of your top competitors is an exciting opportunity to better understand your industry and customers. Gaining greater visibility into the competitive landscape empowers you to light the spark that ignites your brand’s evolution.

If the thought of crafting a competitive analysis seems daunting, we have you covered. In this comprehensive guide, we’ll explore everything you need to know, from why it matters for businesses to the specific steps for conducting a competitor analysis. And we share templates, tools and examples to help guide your analysis.

What is a competitive analysis?

Competitive analysis means evaluating your competitors’ strategies, products and performance to identify market opportunities and strengthen your business position. This process involves examining business intelligence data from across your industry and comparing it to your brand’s benchmarks using competitive intelligence tools. This process is also known as a competitor analysis.

Businesses can do competitive analysis at a high level, but you can also get more granular by focusing on a specific aspect(s). For example, a business might conduct a competitive analysis for another company’s products, sales and marketing. A marketing-focused competitor analysis incorporates data such as your adversaries’ website content, social media presence, brand positioning, pricing strategy and product tiers.

A competitive analysis is essential for future-proofing your business. With the right intel, you can forecast where your industry and competitors are heading, leading your organization with a data-driven strategy and vision.

Why is competitive analysis critical for business?

Competitive analysis drives measurable business impact across your entire organization. Here are five strategic applications:

1. Competitor analysis empowers marketing strategy

Use competitive analysis to better understand your customers and gain a new perspective. Analyze your competitors’ messages and product positioning to confirm the target audiences and pain points they focus on. Compare your findings with your own personas and foundational documents like message architecture or value statements to identify any weaknesses in your strategy.

2. Inform product roadmaps

Armed with a competitive analysis, product teams have the information they need to incorporate highly requested competitor features into their roadmap. Research and development teams assess market opportunities, which supports filling white space in the industry and gaining an edge over the competition.

3. Enhance brand messaging

Competitor analysis research benefits teams at every point in customer acquisition. Marketing teams can tailor top-of-funnel messages to edge out the competition while sales teams can create winning pitches based on competitor weaknesses. Sharing competitor intelligence across the organization empowers teams to build stronger content and close deals.

4. Identify competitive benchmarks and KPIs

Your competitors’ performance helps you understand how to measure your brand’s performance. For example, if a competitor exceeds social media benchmarks in your industry, then you know your performance needs to improve to remain competitive. Use competitor data to craft your goals and objectives.

5. Prepare for new market entry and campaign launches

Understanding the state of your industry is integral to entering a new market or even launching a new campaign. Having a clear picture of your competitors paves the way to outline your market differentiators and position your brand’s unique stake in the industry.

How to conduct a competitive analysis in 6 steps

An impactful competitive analysis transforms raw data into strategic advantage. The process uncovers the “why” behind competitor performance and drives business evolution.

 

Analysis Step	Focus Area	Key Outcome
1. Set Goals	Strategic focus and objectives	Clear analysis direction
2. Identify Competitors	Direct and indirect rivals	Target competitor list
3. Product Comparison	Features, pricing, positioning	Competitive advantages identified
4. Market Analysis	Marketing strategies and messaging	Market positioning insights
5. Distribution Review	Channels and social presence	Distribution strategy gaps
6. Reporting	Actionable recommendations	Strategic roadmap

Step 1. Choose your main focus and goals

Evaluate your industry from a bird’s-eye view. What are the major opportunities and challenges facing everyone in your industry? Who are the key players? What will the industry look like in five to 10 years?

Focus your analysis on specific business objectives rather than attempting comprehensive competitor surveillance. Sprout Social’s powerful Social Listening solution helps you track competitor mentions, analyze customer sentiment and understand engagement patterns in real time, building a foundation for ongoing competitive intelligence.

Define well-defined goals to guide your research depth:

• Do you want to launch new products or features?
• Are you trying to create stand-out marketing campaigns?
• Do you want to ensure your new rebrand will resonate with your audience?
• Are you refining your sales strategy to close more deals?

Having concrete goals enables you to know where you need a deep dive and where it’s okay to stay surface level.

Step 2. Identify your key competitors

Focus on true competitors, not industry giants. Your main competition represents the largest threat to your market position. These are companies your customers actively consider as alternatives.

Pinpointing the top two to three true competitors will yield the best results for your research. Remember, your top competitors are the companies your ideal customer would select if they didn’t choose you. Those companies have similar value propositions, market share and comparable offerings.

Use competitive benchmarking to zoom in on specific details of the market landscape, gauge performance and identify the competitors who are in the lead in your main focus areas. Sprout’s Competitor Reports directly facilitate this benchmarking. Along with benchmarking, you can talk to your sales team and existing customers to determine what competitors they considered before choosing your company’s products or services.

Step 3. Compare your product offerings

Channel your inner private investigator and scour your competitors’ product offerings. As you begin competitive product analysis, consider how your offerings stack up to the competition. What are the unique benefits of your products? Where does your competition have the upper hand?

If you need help answering these questions, consult feedback your customers have shared with your sales team or on review sites online.

Step 4. Conduct competitive market analysis

Assess your market and positioning by conducting a marketing competitor analysis for your direct competitors—the process of researching and analyzing the marketing strategies and tactics of your industry contenders to pinpoint strengths and weaknesses.

For this step, have your target audience, personas and ideal customer profile resources on hand. Use them as a rubric to assess how well your competitor’s marketing addresses the audience’s needs and pain points.

Consider the following questions:

• What content types do your competitors use?
• How much content have they developed in total?
• What is their publishing frequency?
• How many needs and pain points do your competitors claim to meet?
• What calls-to-action (CTAs) and unique selling propositions do they include in content?
• Is their content accurate, polished and well-researched?
• Do your competitors address the same needs as your brand?
• Are there still pain points left unanswered?

These are just a few examples, but you can use these questions as a starting point to identify opportunities for promotion and find industry whitespace that your brand can fill in the future.

Step 5. Review distribution channels

Analyze competitor distribution strategies using competitive monitoring across their website and social media profiles. Sprout Social’s Competitor Reports track posting frequency, content types and engagement metrics across Facebook, Instagram, LinkedIn and X (formerly known as Twitter).

Document their content presentation style and social media execution. Review website affiliations and events to understand their partnership strategies.

Step 6. Reporting and response roadmap

Synthesize your findings in a competitive analysis report and present recommendations in a response roadmap or a competitor map, which contextualizes your research and provides conclusions for data-backed decision making. For example, a SWOT analysis chart is a great example of a competitor map that can visually show your competitors’ strengths, weaknesses, opportunities and threats.

But if other strategy frameworks better illustrate the findings of your research and analysis, skip the SWOT in favor of the best option for you. There are no firm rules about what competitive analysis data sharing must look like as long as it provides value to stakeholders.

After you wrap up reporting, you’re not done with competitive research, synthesis and dissemination. Promote a culture of competitive intelligence across your organization that empowers the collecting and sharing of data and analysis on a regular basis.

Competitive analysis template

If you’re not sure how to get started, use a competitive analysis template for guidance. Our social media market research worksheet explores how you can use social insights to analyze your performance and compare it to your competitors. This template will help you:

• Benchmark your competitors so you understand what success means within your industry and among your shared audiences.
• Dig into the strategies of your highest-performing competitors, and brainstorm tactics to reach the same level of success while finding your niche.
• Share your findings with stakeholders to validate your approach and long-term vision.

Keep reading for step-by-step examples on conducting a competitive analysis in the next section.

Download the template

Competitive analysis examples

Using the steps above, let’s perform a mock competitive analysis using Sprout Social’s fictional coffee shop, Sprout Coffee. Even though this is a fictional business, you can mirror the process for selling software, services and other products.

Example 1. Setting analysis goals

Situation analysis: In this scenario, Sprout Coffee is expanding their coffee chain to a new location and wants to find out how their brand will fare in this locale’s coffee scene. In the last five years, many other coffee shops opened in the same neighborhood, but the uptick in professionals who work remotely has driven demand for cafes sky-high—which makes this area prime for expansion.

Goal: Gather intel about competitors in the new neighborhood and surrounding areas to fuel a strong expansion plan. We will consider price, quality and variety of menu options.

Example 2. Identifying competitors

Using Sprout Social’s conversation overview dashboard, the coffee brand examines the top-performing keywords and hashtags associated with their business online, which is how they hone in on their two biggest competitors.

• Competitor #1: CoffeeCabin
• Competitor #2: JavaHut

Example 3. Comparing competitor product offerings

Evaluate competitor offerings across key differentiators. Here’s how our three coffee shops compare:

 

Competitor	Average Cost	Certifications	Menu Variety	Competitive Position
CoffeeCabin	$4.50	Organic, Fair Trade	30 options	Premium quality, highest price
JavaHut	$2.00	None	15 options	Budget-focused, limited variety
Sprout Coffee	$3.25	Fair Trade	20 options	Mid-market with unique offerings

Example 4. Completing competitive market analysis

Using our brand’s existing target audience research and reviewing competitor websites and social media pages, we will evaluate our competitors’ positioning and how well it resonates with our shared audience.

Audience needs and pain points:

• Affordable, high-quality coffee
• Seasonal flavor variety
• Peaceful and aesthetic atmosphere for remote work

CoffeeCabin:

• Exceeds industry quality standards and ethical guidelines
• Offers a variety of classic choices, but no specialty drink promotions
• Is the most expensive option
• Refined cafe atmosphere shines through in marketing collateral

JavaHut:

• Meets pricing requirements
• Limited variety can leave audience underwhelmed
• Does not meet quality standards
• Only a pick-up window and outdoor seating available

Sprout Coffee:

• Reasonably priced, but not the most affordable option
• Exceeds ethical guidelines, but does not meet quality standards
• Delivers an exciting rotation of seasonal, holiday and speciality offerings
• Cozy cafe and community events encourage remote workers to feel welcome

Example 5. Reviewing digital distribution channels

For Sprout Coffee and our pseudo competitors, Instagram is the most prominent distribution channel. To dig into Instagram performance data, we reference Sprout Social’s Instagram competitor dashboard which reveals JavaHut’s handle @JavaHouse is the leading competitor in terms of follower size.

JavaHut:

• Followers: 17 million
• Upward audience growth

Sprout Coffee:

• Followers: 3,680
• Some periods of impressive audience growth in the past month

Example 6. Reporting and next steps

To package their competitive analysis and reporting, Sprout Coffee decided to compile a SWOT analysis for their new location using the data collected in steps one through five.

Strengths:

• Affordable, mid-market cost
• Wide variety of drink options
• Inviting, community-oriented space

Weaknesses:

• Significantly smaller Instagram following than CoffeeCabin or JavaHut
• No organic certifications

Opportunities:

• Expand Instagram presence using user-generated content from community events
• Explore seasonal promotions and discounts to compete with lower-cost options

Threats:

• Crowded market, with new competitors continuing to move into space

Now it’s time for Sprout Coffee to take all this information and present it to stakeholders and other teammates, and use it to formulate specific strategies.

Top competitor analysis tools

Some aspects of your research will be manual, but others are better off handled by artificial intelligence (AI) and automation. The right competitive analysis tools will optimize your data collection, giving you more time to focus on your strategy.

To analyze millions of social media posts, see how you rank in search engines and view historic insights in real time, check out these competitor analysis tools:

 

Tool	Primary Focus	Key Features	Best For
Sprout Social	Social media competitive intelligence	Competitor reports, Social Listening, cross-platform analytics	Social media marketers tracking competitor social performance
Semrush	SEO and search marketing	Backlink analysis, keyword tracking, traffic monitoring	Content marketers analyzing competitor search strategies
BuzzSumo	Content performance analysis	Content engagement tracking, social reach measurement	Content creators identifying viral content opportunities

Sprout Social

Sprout Social delivers comprehensive social media competitive intelligence through automated competitor reports and real-time listening tools. The platform aggregates data across all major social media platforms, revealing competitor posting strategies, audience engagement patterns and content performance metrics.

Go even deeper with network-specific performance reports and in-depth engagement data that shed light on how different types of content resonate with audiences across each major network, including Facebook, Instagram and X (formerly known as Twitter).

Being able to swiftly gather these essential competitive insights will give you an advantage when making adjustments to your strategy and sharing your analysis with stakeholders.

Semrush

Semrush is a widely used search engine optimization (SEO) tool with industry-leading competitor analysis features. Use Semrush to pull your competitor’s backlinks and monitor changes in their traffic and ranking, like this sample dashboard demonstrates.

Semrush is a valuable tool for understanding who your competition is from an SEO perspective. Highlighting what keywords competitors target influences your content strategy.

BuzzSumo

BuzzSumo allows you to look at the top-performing content for relevant topics for your brand and specific competitors. The content marketing tool looks at engagement and total reach on social sites. This helps identify who is leading the pack in share of voice and industry thought leadership. It can also help you brainstorm new ideas for your content calendar.

Want to learn more? Read our comprehensive list of social media, SEO, content, email and advertising competitor analysis tools.

Keep your friends close and your competition closer

Conducting a regular competitive analysis helps ensure the long-term health of your business. By sharing competitor analysis insights with your entire organization, you give everyone on your team the resources they need to make informed decisions, critical product optimizations and messaging refinements.

To learn more about how to strengthen your competitive strategy within Sprout Social, sign up for a free 30-day trial.

FAQs about Competitive Analysis

What should be included in a competitive analysis?

A competitive analysis Includes competitor product offerings, pricing, marketing strategies, social media presence and customer sentiment analysis to identify their relative strengths and market position.

What are the 4 P's of competitive analysis?

The 4 P’s are a framework for analyzing a competitor’s marketing strategy and customer feedback. They stand for:

• Product (what they sell)
• Price (how much it costs)
• Place (where they sell it)
• Promotion (how they market it).

Social listening can help you analyze Promotion by tracking campaign success and reveal customer perceptions on Product and Price by analyzing conversation sentiment.

How often should you conduct competitive analysis?

Conduct comprehensive analysis annually or biannually, with continuous monitoring for real-time competitor activity tracking.

Is SWOT analysis the same as competitive analysis?

No, but they’re related. A SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis is a framework you use within your competitive analysis. It helps you organize your findings and turn raw data into strategic insights about your position in the market.

What is the difference between competitive intelligence and competitive analysis?

Competitive intelligence is the data that fuels a competitive analysis. Competitive intelligence can come from key sources such as your competitors’ website, social media presence, brand positioning, pricing strategy, product tiers and even recent job postings. Competitive analysis describes the critical thinking required to turn intelligence data into meaningful, actionable insights.

What's the difference between direct and indirect competitors?

Direct competitors offer a similar product or service to the same target audience. Think of them as the alternative your customer would choose if they didn’t buy from you.

Indirect competitors solve the same problem for your audience but with a different solution.